The short answer
Transport and logistics businesses face a simple cash flow problem: fuel, tolls, tyres, registration and wages are paid every week, while freight customers often pay on 30 to 60 day terms. Finance for the industry usually combines three things. Truck and trailer finance funds the fleet, secured by the vehicles themselves and typically written as a chattel mortgage over three to seven years. Invoice finance releases cash from invoices owed by creditworthy freight customers, often within a day of invoicing. And unsecured loans or lines of credit cover lumpy costs such as a major repair, registration renewals or a new contract's start-up. Lenders look at driving and industry experience, contracts with carriers or shippers, the age and condition of the fleet, and the business's ATO position. Owner-drivers on a subcontract with a national carrier are a familiar profile for asset lenders. FundFox arranges finance for owner-drivers through to fleet operators across Australia.
What do transport businesses usually need finance for?
| Need | Common solution |
|---|---|
| A new or used truck or prime mover | Truck finance |
| Trailers, dollies and B-double sets | Trailer finance |
| Delivery vans and utes | Ute and van finance |
| Customers paying on 30 to 60 day terms | Invoice finance |
| Registration, insurance and major repairs | Short-term business loan or line of credit |
| Catching up on tax | ATO debt funding |
How do lenders view owner-drivers?
Asset lenders see owner-drivers every day. The strongest applications pair years behind the wheel with a written subcontract or a steady customer base and a well-chosen truck. A new ABN isn't a barrier on its own when the driver has a long industry history. A deposit, property ownership or a clean credit file all help. Lenders will check the truck's age at the end of the term, so an older prime mover may need a shorter loan.
Why invoice finance suits freight
Freight is usually invoiced to businesses, often large ones that pay reliably but slowly. That's the profile invoice finance is designed for. Advances of around 70% to 90% of each approved invoice can arrive within a day, smoothing out the weekly fuel and wage bills. A business with most of its income from one carrier may get a lower advance rate, because the lender's risk is concentrated.
What do lenders look at for transport businesses?
- Experience and licences: years driving, licence class and any incidents.
- Contracts: subcontract agreements, rates and how long they run.
- The fleet: age, kilometres, maintenance and existing finance.
- Cash flow: fuel and maintenance costs against income, through slower periods.
- Tax: lodgements and any ATO debt, a common issue after a run of high fuel costs.
Tax and depreciation points for fleets
Trucks over 3.5 tonnes GVM have a capped effective life of 7.5 years, and trailers over 4.5 tonnes 10 years, if you use the Commissioner's determination. That affects depreciation and is one reason trailers are often financed over longer terms than the trucks that pull them. Heavy vehicle registration and access rules are managed through the National Heavy Vehicle Regulator and the states. Ask your accountant how a fleet purchase affects your tax.
Example scenario
A refrigerated transport business with six trucks wins a supermarket distribution contract paying on 45-day terms. The broker sets up a debtor finance facility against the new customer's invoices and finances two additional refrigerated rigids on separate chattel mortgages, so the extra wages and fuel are covered from the first week.
Example only. It isn't a real client.
